Malaysian PM Anwar Defends Cutting Diesel Subsidies, Prioritises Public Welfare

PUTRAJAYA – Prime Minister Anwar Ibrahim defended the Malaysian government’s decision to rationalise diesel subsidies, stating that it was a necessary move despite its unpopularity. As of June 10, Malaysia has adjusted diesel subsidies, floating retail prices to the market rate of RM3.35 (96 cents) per litre, marking a 55 percent increase.

Mr. Anwar emphasized that the decision, long discussed and agreed upon by previous prime ministers, was delayed due to its political implications. “Politicians usually consider the political impact before they decide to introduce policies. In the case of subsidy rationalisation and tax increase, the impact will be a burden to politics,” he said.

Speaking at a monthly gathering of the Finance Ministry’s staff, Mr. Anwar, who also serves as Finance Minister, explained that the targeted subsidies would ensure that the majority of the population continues to benefit while excluding the wealthy, foreigners, and major industries. “The money saved from the rationalisation policy will not be used to increase ministers’ allowances. It will be channelled back to the people in terms of subsidies and cash aid,” he assured.

Addressing criticisms regarding his earlier promise to reduce oil prices, Mr. Anwar clarified that the statement was made in 2008 when the economic context was different. He pointed out that oil prices in Saudi Arabia were around 50 sen, compared to Malaysia’s RM1.50 at that time. “Now, ours is around RM2.05 and Saudi Arabia’s oil prices are in the region of RM2.95. How do you relate the cost in 2008 with the current cost?” he asked.

The Prime Minister highlighted that recent policy changes, including adjustments to electricity tariffs, floating chicken prices, and implementing targeted diesel subsidies, would result in savings of about RM10 billion annually. He noted that those impacted by the diesel subsidy rationalisation, such as vegetable farmers in Cameron Highlands, could appeal for assistance to prevent price hikes that would burden the public.

Aware of the unpopularity of such measures, Mr. Anwar expressed his commitment to prioritising the country’s welfare. “I want to prove that not all politicians are self-serving, arrogant, and do not think of the people. I want to prove that as a team, we can raise the good name of the country. I am convinced that this can be done,” he stated.

He concluded with a promise to continue fighting for what is right for Malaysia: “I have the mandate and I will do it. When the time comes and if I have to go, I will. But while I am here in office, I will stay and fight for what is right to make sure Malaysia emerges as a great nation.”

The diesel price in Peninsular Malaysia is now set at RM3.35 per litre, effective June 10, based on the unsubsidised market price using the Automatic Price Mechanism formula in May. However, for those in Sabah, Sarawak, and Labuan, the price remains at the subsidised rate of RM2.15.